The most commonly used indicator for comparison purposes is the ratio of expenditure on R&D to Gross Domestic Product. As the table below shows, in 1996-97 Australia spent 1.68% of its GDP on R&D, ranking it slightly above Canada and well below some of the leading industrialised countries such as Japan (2.83%), Korea (2.79%), Switzerland (2.74%), the United States (2.62%), Finland (2.58%), France (2.32%), Germany (2.29%), the Netherlands (2.09%), Denmark (2.01%) and the United Kingdom (1.94%).

In terms of business R&D, Australia's ratio of R&D expenditure to GDP (0.80%) is again below the ratios for the industrialised countries referred to earlier, but is also lower than for Canada (0.99%).

For government sector R&D as a percentage of GDP, Australia ranks higher. A ratio to GDP of 0.40% places it fifth in the group of OECD member countries for which data are available, behind only Iceland (0.62%), France (0.47%), Korea (0.45%) and Finland (0.41%). Government sector R&D as a percentage of GDP is much larger for Australia than for Japan, the United States and the United Kingdom.

For the higher education sector, Australia also ranks quite highly. With a ratio to GDP of 0.45%, it ranks behind only Switzerland (0.67%), the Netherlands (0.60%) and Finland (0.47%). However, the Australian ratio is very similar to the ratios for a number of other countries including Japan, the United States, France, Germany, Denmark and the United Kingdom.